The online grocery segment in the country is expected to grow significantly and double its market share within the next three years, according to Tetra Pak Index 2018.

Tetra Pak Malaysia, Singapore and Philippines MD John Jose said the widespread use of smartphones has contributed to the growth in online channel for the food category.

“Consumers are looking for the most convenient channels which let them make purchases anytime and anywhere by using their smartphones.

“This will pave the way for the rapid rise of the online grocery shopping segment,” he said in a statement in conjunction with the release of the 11th edition of the Tetra Pak Index recently.

Jose said the index forecasts that the segment will grow by 17% worldwide from 2017 to 2022.

“At the same time, traditional grocery outlets such as supermarkets and convenience stores will continue to play a major role in the market, but with a much slower growth rate of only 2% to 5%.

“With the mobile Internet users in Malaysia likely to increase by 5% over the next few years to reach over 21 million users, the online segment is expected to grow in tandem with this trend,” he added.

Meanwhile, consumer market research company Kantar Worldpanel Malaysia’s business group director Cynthia Su said the country is among the fastest-growing markets in the fast-moving consumer goods’ (FMCG) online channel.

“Currently, the FMCG online channel in Malaysia is dominated by baby and beauty products.

“However, the food category has been charting a notable upward trend with one out of every three online shopper purchasing food items. This rise is expected to continue,” she said.

According to Tetra Pak, there are challenges that companies must address, in terms of product development, due to the rise of FMCG’s online channel such as products that are easy to consume, keep and transport.

This is followed by the sustainability of design; personalisation and uniqueness; as well as technology and performance which include packaging tracking systems to boost efficiency in online grocery logistics.

It added that another important element in the online grocery space is smart packaging, by utilising codes to communicate with consumers such as RFID (radio frequency identification) or QR (quick response) codes.

Jose said smart packaging features allow brands to provide consumer experience which is a key factor in online grocery shopping.

“Sharing important information such as production materials, nutrition facts, current promotions and environmental initiatives is only one of the examples of how smart packaging can be used.

“It opens up all kinds of possibilities for strategic communications and creating a sustainable relationship with consumers in the future,” he added.

According to Tetra Pak, a report revealed that Malaysia posted an 88% growth rate in the online channel for FMCG sales, having captured 1.5% of the FMCG sales last year.